Speak it softly …“ flat” will be the new“ up” in 2018
Well, we didn’ t really need the MAG filings to remind us what a difficult market we are faced with, but it certainly has thrown current trading into sharp focus. I don’ t intend to get into the MAG issue as such here. Enough has already been said and written, and much of it ill-informed and downright inaccurate. Of course, any business getting into trouble is a bad thing, regardless of how and why, and, of course, when it is a‘ major’ such as MAG, the ripples spread far and wide. In my conversations with MAG CEO Andy Graves, it is clear that he is sensitive to the damage this is likely to be doing to the group’ s vendors, especially to those for whom Tucker Rocky / Biker’ s Choice is a primary or even exclusive income channel. I know from those who have made contact with me that there is“ hurt out there”, but since I am writing this before the 30 day post-filing cycle has lapsed, at this stage all I will say is that from my dealings with MAG since November 15th( the filing date), it is clear the company is only too well aware of its importance to its“ trusted partners” and of the importance that trust has for dealer sales moving forward. No product lines, no ball game! For now though, we are all in a holding pattern. What I would like to pick up on here though is the dialog that I had with Graves about the market cycle that has led MAG to this place, and the likely evolution of that cycle moving forward. He is of the view that logic dictates that even if we are destined to traverse the bottom of another one of those very broad U-curves that have haunted us for a decade now, there are more reasons to believe that the worst of the decline is behind us. Even if“ flat” is the new growth for now, there are signs for modest optimism.
I don’ t dare put any kind of timescale on it( who would), but if we do have a couple of years of a level playing field, then, barring any kind of macroeconomic calamity or socio-political upheaval, the logic is that growth should follow. My observations are mostly informed by my reading, by having been to so many shows recently, especially in Europe, and after spending months scrutinizing so much of what is going on with the custom bike community at this time, in advance of getting heavily into October 2018 AMD World Championship and INTERMOT‘ Customized’ preparations, and comparing that to what was being seen at this point in the cycle 24 and 48 months ago. In those contexts, there is some evidence that the so-called“ new gen” of professional customizers and the riding cohort they work with( they are not just customers, but collaborators, partners even) are already starting to pay more attention to air-cooled and liquid-cooled V-twins than might yet have been expected.
‘ atrophy will become stability’
At this stage it is largely older and less expensive models fuelling the ongoing“ retro” passion, rather than new examples. In price point terms even at the Scout, Sportster and Street end of the market, credit apps have not yet returned to being the new normal for those“ younger” enthusiasts, and especially not those entering the custom market for the first time. But entering it they are. In turn the first members of that new generation, those that inspired the emergence of new media brands some five or more years ago, inspired the new fashions and adopted the new uniform and triggered the new generation of“ events”( they are really tribal gatherings rather than shows as we know them – which sounds historically familiar) are already beginning to morph into that reassuringly familiar, if migratory, species known as lesser spotted“ consumers”. Additionally, and as Harley CEO Matt Levatich put it in January 2017, used motorcycles are coming into play as the new entry level platform, and the firming up of used prices is as much to do with younger buyers as it is to do with hard pressed middle-aged riders who, for one reason or another, have not yet started to enjoy the trickle-down benefits that orthodox economics would suggest should come with a booming employment market. For whichever range of reasons that may be, the classic interpretation of a strong used bike market is its positive impact on parts and accessory sales, customizing and riding lifestyle engagement. Are you seeing that yet? No, of course not, I realize you are not. But, if, as I believe will be the case, we are going to see the atrophy become stability, then, in all probability, you will … at some stage. Factor into that what is happening to the market share that cruisers are taking of currently available sales of new motorcycles in the United States( relative to other street bike offerings and sport bikes, cruisers are holding up better, believe it or not) and the eventual impact that Harley’ s new model blitz and the entry into the market of competition in the form of Indian Motorcycle and, actually, reaching for the off-switch, could be interpreted as being premature. Is all this a trend yet? No! Is it something to bet the farm on? Hell no! But is there logic there? Well, yes, actually there is. We just all have to“ hang on in there” in the meantime and not lose sight of the twin pillars of business recovery that have always characterized the winners versus the losers in emergence from any downturn- investing in brand profile and new products.
Robin Bradley Co-owner / Editor-in-Chief robin @ dealer-world. com
4 AMERICAN MOTORCYCLE DEALER- DECEMBER 2017 www. AMDchampionship. com